I think it‘s just an old PC term for turn-based games where you play multiplayer on the same machine with the same peripherals. Basically, you play your turn, get up, let the next player take the seat in front of the monitor, they take their turn, etc… Since not everyone is playing at the same time, you can play together by playing in succession. „Hotseat“ as in passing the seat in front of the PC around like in hot potato, I guess lol